France: PPR 1H Net Profit Up 54 Percent

PPR SA said profit for the first six months of 2007 was 303 million euros ($413 million), compared with 196 million euros a year ago. Operating profit for the period rose 40 percent to 630 million euros ($860 million) from 450 million euros.

PPR made a major Puma acquisition in April worth 5.3 billion euros ($7.18 billion), which Chief Executive Francois-Henri Pinault said was "at the very core of our strategy."

PPR owns 62.1 percent of Puma, the world's third-biggest athletic apparel maker. Pinault said in a news conference it is "no longer a strategic priority to increase our stake."

Excluding Puma AG, operating profit rose 27 percent, the company said, thanks to increases in operating profit at the book and CD chain FNAC, African car distributor CFAO and luxury goods division Gucci.

The fast-growing division posted a 55 percent increase in operating profit with the highest improvement coming from Bottega Veneta, Yves Saint Laurent and YSL Beaute brands, the company said.

"This is a very satisfactory performance ... our profitability rates improved," PPR Chief Financial Officer Jean Francois Palus said Friday in a conference call with journalists.

The performance of PPR's furniture chain Conforama slightly weakened, Palus said, weighed down by its Italian business.

FNAC, which increased operating profit by 22 percent, recorded improved profitability for the fourth year in a row, Palus said.

He also said that the company's catalog division, Redcats, was profitable, in contrast to competitors in the struggling sector.

In July, PPR recorded 11 percent growth in sales to 9.24 billion euros ($12.6 billion).

PPR said it expected "favorable prospects" for the full year, and Palus said Friday the company's target of improved financial position compared to last year would include operating profit and cash flow.

Palus said the company was satisfied with its current 62.1 percent stake in Puma, which it consolidated into group accounts in April, but did not rule out buying shares on the market.

The stock closed Thursday at 121.85 euros ($166.30), giving the company a market capitalization of 15.39 billion euros ($21 billion).